According to statistics, 21% of adults in the UK experience money worries, while 55% have seen their mental health suffer as a result of their financial concerns. These are undeniably distressing figures, and greater levels of economic planning could help to bring these numbers down, but how can we ensure that the next generation do not follow a similar pattern?
Educating our children on monetary matters can play a pivotal role in safeguarding their financial future, and some primary schools are taking steps to address the subject. However, there’s no doubting that it’s a tricky topic to tackle, with many different opinions on how it should be done.
Here, we’ve outlined three steps you can take to help your kids learn more about money and hopefully assist them in avoiding the same difficulties that so many others have fallen into.
Set a good example
Children are like sponges, soaking up everything that goes on around them, and that information influences their future behaviour. Dealing with money is certainly no different, which is why being aware of how you spend and save your cash around your kids is paramount. If you’re consistently wasting money on impractical items or in irresponsible ways, your young ones are likely to grow up believing that to be the norm. Similarly, if you save in a sensible manner and are prudent with your spending, children will see the benefits of such behaviour and might be more inclined to copy it.
It’s important that your children begin to understand the role money has to play in our day-to-day lives. To do that, you can make them aware that even the most run of the mill things – such as catching the bus into town or doing the food shop – require money, and therefore need to be factored into the equation. You don’t want to overwhelm them with too much information at a young age, but as your little ones get older and develop a greater appreciation of how the world works, you can educate them on the more complex financial matters such as mortgages, tax, credit cards and ways to source external funding.
Give them responsibility
That’s the theory covered, but arguably the fastest way for children to learn about money is to give them some that they can call their own. In 2018, the average child received approximately £5 a week in pocket money, but the amount you hand over is entirely at your discretion. Whatever you decide, the key lesson for your young ones is that once that money is gone, there’s no getting it back, so they may swiftly learn that spending it all on sweets or a cheap toy that soon breaks or gets forgotten about might not prove the best use of their cash.